Kevin Drum

Shaking the Federal Money Tree

| Mon May 31, 2010 1:16 PM EDT

Lots of lefty econ bloggers have suggested that the answer to our financial woes is a walloping big second stimulus. But we aren't getting one. Tyler Cowen thinks that should tell us something:

Reading the Keynesian bloggers, one gets the feeling that it is only an inexplicable weakness, cowardice, stupidity, whatever, that stops policies to drive a more robust recovery. The Keynesians have no good theory of why their advice isn't being followed, except perhaps that the Democrats are struck with some kind of "Republican stupidity" virus. [...] The thing is, that same virus seems to be sweeping the world, including a lot of parties on the Left.

Romer, Geithner, Summers, et.al. know all the same economics that Krugman and DeLong and Thoma do. If a bigger [aggregate demand] stimulus would set so many things right, they'd gladly lay tons of political capital on the line to see it through and proclaim triumph at the end of the road.

Except they expect it would bring only a marginal improvement.

Now, there are a few things to say about this. First, Tyler's definition of "marginal" might be different than, say, Krugman's. Would a two-point drop in unemployment be marginal? Or dramatic? Second, it doesn't have to be weakness or cowardice driving the Obama team's actions. If, for whatever reason, they've concluded that a second stimulus is simply politically impossible, then they're going to turn their attention elsewhere no matter what they think about it. That's just common sense. Third, even if a ton of political persuasion might (barely) push a second stimulus bill through, it might be too late. They might disagree with Krugman et. al. not on fundamental grounds, but simply on timing.

But despite all this, there's one pretty good reason to think that Tyler is basically right: tax cuts. Lefty economists might generally believe that increasing spending is a more efficient way of stimulating consumption than reducing taxes, but they'd almost certainly accept a big tax cut as an almost-as-good substitute. And tax cuts have two big advantages over spending. On the substantive side, they work faster. Spending takes time to work its way through the economy, but a tax cut (for example, a payroll tax holiday) boosts the economy almost immediately. And on the political side it's quite doable. Republicans would be persuadable because they love tax cuts and Democrats would be persuadable because it would help the economy. For Obama, then, it would be the best of all worlds: a fast stimulus that gets bipartisan support, something that boosts the economy while dampening the inevitable criticism he'd get for blowing up the deficit.

But he's not pushing for this. Not even quietly. And this suggests that Tyler is right: Obama's advisors might be in favor of further fiscal stimulus, but not by much. And the best explanation for this is that lefty or not, they're genuinely afraid, as Tyler says, that it would bring only marginal improvements at the cost of significant problems down the road.

But would it? I'd like to hear more about this. I feel like the liberal economic community is largely getting a free pass on this because the opposition has been so stupid: if you're arguing that inflation (or hyperinflation!) is a near-term threat that needs to be vigilantly opposed, it's pretty easy to explain why this is wrong. But the better argument is that inflation is a long-term threat that has to be contained early, because once the genie pokes its head out of the bottle it's very, very hard to stuff it back in. And the medicine it takes to do the stuffing is painful indeed.

Now, that argument might be wrong too. But because conservatives mostly aren't making it, liberals mostly aren't taking it on. But they should. Political realities being what they are, reining in the federal deficit will be hard even under the best of circumstances, and if we decide to make it worse now it's going to become even harder to rein in down the road. That's not a problem for today or tomorrow, but it might well be a problem in 2015. Right?

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Griping About Obama

| Mon May 31, 2010 12:18 PM EDT

Matt Steinglass reins in his temper better than me today and writes lucidly about the moronic critiques of Barack Obama's emotional response to the BP oil spill, culminating in Maureen Dowd's angst this weekend over Obama's "inability to encapsulate Americans' feelings":

Ms Dowd's involvement is fitting, as this may be the sorriest spectacle of content-free public hyperventilation since Al Gore's earth tones. The difference is that in this case the issue is deadly serious; it's the public discourse that is puerile. There is plenty of room for substantive critique of the flaws in governance and policy uncovered by the Deepwater Horizon blowout. You could talk about regulatory failure. You could talk about corporate impunity. You could talk about blithely ignoring the tail-end risk of going ahead with deepwater drilling without any capacity to cope with catastrophic blowouts. Precisely none of these subjects are evident in the arguments our pundit class is having. Instead we have empty-headed squawking over what the catastrophe is doing to Barack Obama's image.

Look: no one knows how to stop this spill. It's not a matter of effort, it's a matter of the current state of human knowledge. As Matt says, the substantive critiques are fine (Obama should shut down all offshore drilling, he should send more workers to clean up the shore, he should use this as an opportunity to talk about clean energy, etc.), but witless griping about Obama's emotion level or his need to "take charge" is just dumb. Knock it off, everyone.

Nonfiction on the iPad

| Sat May 29, 2010 5:21 PM EDT

I asked this once a while back, but now that the iPad has been out for a while I want to ask again: how good is it for reading nonfiction books? Specifically, I have two questions for iPad users who read a fair amount of nonfiction:

  • How good is the selection of nonfiction? (Obviously this will vary from person to person depending on what kind of nonfiction they read.)
  • How well is nonfiction rendered? That is, is the layout of tables, charts, images and so forth similar to a paper book?

I've read a ton of commentary about the iPad, but oddly little about how good it is as a book reader. But in my case, that would be its primary function, with all its computerish functions secondary. So what's the verdict, nonfiction fans?

Citizens and the Census

| Sat May 29, 2010 4:47 PM EDT

In the LA Times today, Richard Greener and George Kenney haul out a familiar conservative hobbyhorse: illegal aliens are counted in the census and this produces an unfair apportionment of congressional districts:

The reapportionment of today's static 435 seats according to census results would be a respectable example of representative democracy if each individual included in the count had a vote.  But, just as in 1790, the system remains badly fractured and fundamentally unfair.

Hmmm. Kids and (in some states) felons can't vote. But we count them. In the 19th century women couldn't vote. But we counted them. In 1790 residents without property couldn't vote. But we counted them. Hell, slaves couldn't vote either, but the infamous 3/5 compromise shows that the founders deliberately agreed to count them in the census for purposes of congressional representation anyway. So voting status is a pretty poor argument for not counting non-citizens. But even if you agree with Greener and Kenney for other reasons, their solution is deliberately obtuse:

The good news is that the Constitution leaves the manner of conducting the census, and the apportionment of the House, up to Congress. Passing a census reform law should be a relatively simple fix, if we have the leadership and the will to do so.

Would this work? Let's go to the text of the constitution:

[Article 1 Section 2]: Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.

[14th Amendment]: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States....Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed.

The text is pretty clear: citizens is used in some places and persons is used in others. And persons means just what you think it means. So if you want to change the way non-citizens are counted in the census, Congress isn't enough. You need a constitutional amendment. Because, in this case, both the plain text of the constitution and the intent of the framers is quite clear. From a CRS report written earlier this year: "The Framers adopted without comment or debate the term 'persons' in place of the phrase 'free citizens and inhabitants' as the basis for the apportionment of the House....During the debate on the Fourteenth Amendment, Congress specifically considered whether the count was to be limited to persons, citizens, or voters. The term 'persons' was used instead of 'citizens' due, in part, to concern that states with large alien populations would oppose the amendment since it would decrease their representation."

If Greener and Kenney want to change the way states are represented because they're afraid the Mexican government might collapse, "sending hundreds of thousands of refugees across the border," that's fine. But pretending this is something Congress can do on its own is just populist demagoguery. They know better.

Quote of the Day: Sarah Palin's Mob

| Sat May 29, 2010 3:25 PM EDT

From author Joe McGinniss, who was besieged by Sarah Palin's fans after she portrayed him as a wannabe pedophile when he rented the house next door to hers:

Look, this is a pain in the ass for them. I understand that. If I were her, I'd be upset. I'd be annoyed. But I'd be an adult about it, and I would figure out, okay, how can we resolve this in a way that's not going to make into something that everybody gets obsessive about? By being here I have learned things, and I've gotten an insight into her character, into her ability to incite hatred, that before I only knew about in the abstract.

Dave Weigel has the rest here.

Friday Newsletter: The End of 24

| Sat May 29, 2010 11:12 AM EDT

Here's my Friday newsletter post from this week. And it reminds me: I have virtually no TV shows left that I watch regularly. Any non-HBO recommendations from the crowd?

Two of my favorite TV shows ended their lives this week: Lost and 24. Lost has gotten endless coverage for its season finale, its fan base polarized between hating it because it failed to resolve any of the questions they've been obsessively hashing over for the past six years, and loving it for the way it mawkishly closed the loop on all the characters they've come to love, finally allowing them a well-deserved measure of peace and contentment.

You can count me among the haters. But though it got less attention, it was the finale of 24 that was a bigger cultural moment: in a way, its ending, not the 2008 election, marked the final close of the George Bush era. For nine years, starting just two months after 9/11, super agent Jack Bauer has been fighting terrorists on American soil, and in many ways the show's message was a neocon’s wet dream: America was always under relentless attack; the bad guys were from the Middle East as often as not; time bombs really, literally, ticked; and torture not only worked, it was practically a patriotic duty.

This was, in a lot of ways, a reflection of the American id during the Bush years. But there was always more to 24 than just its anti-terrorist heroics, just as there's more to the American id than fear of foreign attack. Jack Bauer may have stolen the show when the action was in the field, but it was the White House that stole the show the rest of the time. And there, its message was considerably different. The terrorists, it turned out, were often being bankrolled by American superpatriots. Hawkish foreign policy, it turned out, almost always failed miserably. Hawks themselves, it turned out, were almost always stupid, cowardly, scheming, and blinkered. And the terrorists themselves, far from hating us for our freedoms, were either pawns of powerful interests or else ideologues who hated us for things we actually did.

So while one of the lessons of 24 was the hawkish one that everyone — including its creators — always talked about, neither the show nor America itself was ever so simple. Even during the height of the war on terror, Americans wanted to be assured that this was all just a temporary frenzy, that there was a better way of engaging with the world than bluster and vengeance. That message was always a part of 24 too, and it was a big part of what made the show so successful. But when Barack Obama entered the White House and brought that better model of global engagement with him — well, we didn't really need a TV show to remind us that better days and better ways would someday be possible again. We had real life for that, and that spelled the end of 24.

So will I miss 24? Not really. It filled two needs for a decade, one cathartic and one aspirational. The aspirational message never got the same attention as the heroics, but it was every bit as central to the show's success. The fact that neither message holds our attention the way they used to is well worth the loss of an hour of Monday night escapism.

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Friday Cat Blogging - 28 May 2010

| Fri May 28, 2010 3:16 PM EDT

Domino hopped into the TV cabinet the other night and spent most of Jeopardy! staring out at us. The only way to save this moment for posterity was by using a flash, so that means today we get to see mild-mannered Domino rip off her mask and take to the blog as LaserCat, sworn foe of digital clocks and Blu-Ray players. Beware her powers. By the next day, however, she was back to being Domino, and Inkblot was willing to settle down next to her because it was nearly 5 o'clock and he didn't want to stray too far from the food bowl. Sure enough, his attentiveness paid off and food magically appeared. Assuming you consider a can of Fancy Feast to be magic. Which he does.

Have a nice three-day weekend everyone. But don't offer your pets anything in return for a job. That could spell trouble.

Dick Durbin Takes On the Debit Card Mafia

| Fri May 28, 2010 3:03 PM EDT

Sen. Dick Durbin successfully passed an amendment two weeks ago that would limit the outrageously high interchange fees that Visa and MasterCard charge merchants for debit card transactions. This was a big win that reins in some pretty indefensible industry practices, but Visa and MasterCard are (unsurprisingly) fighting back. How? Well, they can hardly expect to gain much sympathy for either themselves or the Wall Street giants whose profits might get trimmed by Durbin's amendment, so instead they're mounting a coordinated campaign that claims it's small credit unions who will suffer the most. This is despite the fact that Durbin's language specifically exempts banks with less than $10 billion in assets and specifically requires merchants to accept all cards in a particular network regardless of which bank issues them. If a small credit union charges a higher fee than Citibank, your local 7-11 would have to take their Visa debit cards anyway.

So small credit unions are pretty well covered. But that hasn't stopped Visa and MasterCard from taking to the parapets anyway. Via Annie Lowrey, though, it looks like Durbin is fighting back. Here's a letter he sent to the CEOs of Visa and MasterCard:

It appears that, in an effort to frighten small banks and credit unions into opposing the amendment, your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules. These changes, which are not in any way required by the amendment, are unnecessary and would disadvantage small card-issuing institutions.

I ask you each to state unequivocally that you are neither threatening nor planning to take steps that would purposefully disadvantage small institutions, should the amendment become law. Further, I warn you that if your companies coordinate with each other or collude with your largest member banks to make changes to your fees and rules, it would raise serious concerns that you are engaging in an unlawful restraint of trade.

Good for Durbin. I hope he follows through with this.

Chart of the Day: Median Voters Unite!

| Fri May 28, 2010 1:25 PM EDT

Has the Republican Party lost sight of its roots? Does it need to return to a purer version of conservatism in order to return to power? Alan Abramowitz takes a look at the recent evidence in Senate races and concludes just the opposite: the more conservative a Republican candidate is, the worse they perform:

The results in Figure 1 show that there was a fairly strong negative relationship between conservatism and electoral performance. The more conservative the voting record, the worse the performance of the incumbent. Republican senators with moderate voting records like Olympia Snowe, Susan Collins, and John Chafee generally ran well ahead of the Republican presidential candidate in their state while those with very conservative voting records like John Ashcroft, James Inhofe and Jim Bunning frequently ran behind the Republican presidential candidate.

Italics mine. Abramowitz then goes on to rerun the data while controlling for things like the strength of the challenger, the national political climate, and the presence of any major scandals or controversies involving the incumbent. The results are the same: "For every additional one point increase in conservatism, Republican incumbents lost an additional three percentage points in support relative to their party's presidential candidate."

For the time being, none of this matters. Parties that suffer stunning losses — the Democrats in 1980, for example, or Britain's Labor Party in 1979 — frequently decide that they need to double down and return to the true faith. After losing a few more elections they finally move to the center and start winning again. I imagine the same will happen to Republicans. They're sure to win seats in this year's midterm, which will confirm them in their view that hardcore conservatism is what America wants, and they'll have to lose badly again in 2012 to finally convince themselves otherwise. By 2016 they might be ready for prime time again.

GOP Takes Over the Tubes

| Fri May 28, 2010 12:25 PM EDT

Back in the early aughts, liberals took an early lead in the blogosphere and never looked back. Conservatives were apparently too stodgy, too top-down oriented to make effective use of online technology. But Stephanie Mencimer reports that now the worm has turned:

When it comes to employing Facebook, YouTube, Twitter, and other social-media sites, Republicans are whipping their opponents across the aisle, creating a growing tech gulf that threatens important implications for the 2010 mid-term elections.

Boehner, for instance, has 42,967 Twitter followers. And Pelosi? Well, she can’t have any followers, because she doesn’t tweet. Patrick Bell, the director of new media for House Republican Conference vice chairwoman Cathy McMorris Rodgers, keeps close tabs on what the Dems are up to. He says that as of January 2010, only 34 percent of Democratic House members were on Facebook and only 20 percent had hit Twitter. Meanwhile, since January 2009, the percentage of House Republicans using Facebook has jumped from 37 percent to 79 percent (as of early April). Sixty-four percent of these GOPers are on Twitter, compared with 28 percent in January last year. And 89 percent now have a YouTube channel, compared with 56 percent last year.

....[An] initiative to get more members virtually engaged appears to have succeeded wildly. In April, Rodgers launched a six-week contest organized like a "March Madness" ladder that was designed to nudge members of Congress into the Twittersphere. It seems to have succeeded wildly. This "new media challenge" is about to come to an end this week, as Rep. John Fleming (R-La.) and Rep. Phil Gingrey (R-Ga.) duke it out for championship title as the House member with the most increased social media use. (The winner will be announced after the Memorial Day break — on Twitter, naturally.)

I'm going to take a guess here: online technology is fundamentally more attractive for insurgents than it is for the party in power. Partly this is because the party in power already has lots of other tools available for fundraising and communications. Partly it's because the party in power is more invested in leadership keeping control of its message. Partly it's because the party in power is just flat out busier with the actual work of governing. And partly it's because online chatter is riskier: if you're tweeting all day long you're bound to screw up sometime and say something stupid. That's more dangerous for the party in power than it is for the party out of power.

The political internet, at least in its current incarnation, is fundamentally crowd-based. Anyone can jump in, nobody's in control, and it's an ideal medium for people who are pissed off at the establishment (including their own establishment) and are looking for a way to break through. In other words: people who are out of power. In the early Bush era, this was liberals, and the blogosphere was the cutting edge of online activism. So liberals took over the blogosphere and made it into a liberal duck pond. Today it's conservatives, and social media is the cutting edge of online activism. So it's not surprising that conservatives are doing the same. Nancy Pelosi probably figures she has better things to do.

That's my guess, anyway. For what it's worth, though, I don't expect this state of affairs to last much longer. The internet is very quickly outgrowing its adolescence, and before long it's not going to be any more friendly to insurgents than 30-second radio spots or mass fundraising appeals. Enjoy it while you can.